After talking to hundreds of fitness business owners, we realized that client retention is a widely misunderstood concept and a highly underrated performance metric.
Most business owners think that retention is merely the number of clients at the beginning of the month minus the number of customers leaving in that particular month.
But this is not at all correct!
The problem with measuring retention in this way is you are not differentiating between someone who joined in January and stayed till June and someone who joined in May and stayed till June.
And what does this result in? You measure your retention much higher than it actually is.
To begin with, why should you be even bothered about your retention? Here's why:
Apart from measuring retention incorrectly, another mistake that most business owners make is believing that the retention rate is a measure of how well your business is doing.
It is a way more powerful metric than that.
Your retention rate lets you draw insights that will help you craft intelligent retention strategies resulting in the growth of your business.
Let us understand how!
Your studio management software should provide granular analytics of your retention in the form of a report which looks something like this.
Although the chart looks daunting, it is very simple to read.
Let’s say you are looking at the last one year’s data.
The X-axis will tell you the month in which your client first booked a class at your studio.
The Y-axis will tell you how many of those clients stayed with you month over month.
For example: If 154 new clients booked a class in January, January becomes your Month 0, and 100% of them were with you. Coming to Month 1 which is the next month - February 71% of 154 stayed with you. Similarly, 65% of 154 stayed with you in March and so on.
Now, let’s try to read the report for June. According to the chart, 877 customers signed up in June of which only 39% of them stayed in July and 28% of 877 continued in August and so on.
Why do you even need this super complex information?
Here is why.
Your retention rate will play a vital role in understanding your business.
Taking the example of this report, the following insights can be drawn:
You can take strategic steps using these insights to increase the retention rate which in turn will help you grow your business. These steps can look like this:
These are some basic actions that you can take looking at this report.
To enable this, make sure that your software gives you granular reports giving you deep insights that will make you a more intelligent entrepreneur.
If it doesn’t, then it is time to re-evaluate your current software and move to one that gives you granular analytics of your retention. One that is not just management software but a partner in your growth.
Your search ends here.
Bookee will provide you with the Knowledge & Intent, Software, and Support along with detailed analytics for you to launch, run and grow your fitness business.
With Bookee, you will get: